Hassett’s Fed chair candidacy received pushback from high-level people close to Trump, sources say
Kevin Hassett’s candidacy for the Fed chair, while once viewed as a near-certainty in the market, has received some pushback from senior figures with President Donald Trump’s ear, according to people familiar with the matter.
There are concerns that the director of the National Economic Council is too close to the president, ironically making him the front-runner to replace the current chairman, Jerome Powell, the sources said. The pushback may help explain why interviews with candidates were canceled in early December and then rescheduled for last week, at least for Warsh.
After telling reporters he knew who he would pick to lead the Fed, Trump surprised investors in an interview with the Wall Street Journal on Friday when he said former Fed Governor Kevin Warsh was at the top of the list of Fed candidates, along with Hassett. The comments caused Hassett’s fortunes to plummet in the Kalshi prediction markets.
“I think the two Kevins are great,” Trump said.
hassett ruins Kalshi is the favorite on Monday with a 51% chance, but that is down from a high of over 80% earlier this month. Warsh’s odds have increased from 11% in December to 44% now.
The pushback took the form of supporting Warsh rather than criticizing Hassett. At a JPMorgan event on Thursday, CEO Jamie Dimon spoke positively of both Hassett and Warsh but made some comments that would lead viewers to believe Dimon supports the former Fed chair.
Bloomberg News reported At the end of November, Hassett became the first in line to replace Powell, whose term ends in May.
However, as December progressed, Hassett’s candidacy met with some resistance, according to various sources; Concerns have grown that the bond market could eventually run riot if Trump sees it too much in his pocket. This view could have the opposite effect that Trump wants; long-term yields may eventually rise due to concerns Hassett won’t do enough to contain inflation if it ever picks up.
Perhaps in response to some of that criticism, Hassett was more assertive about the Fed’s independence in an interview with CBS News last weekend.
“Trump has very strong and well-founded views about what we should do,” Hassett said on “Face the Nation.” transcript.
Asked whether the president’s opinion would carry the same weight as the opinion of a voting central banker, Hassett said: “No, no, he won’t have any weight. All that matters is whether his opinion is a good one, that is, if it is based on data.”
